Major US VC fund briefs its regional investors

THLi tells local investors that it will only put their money in companies with sound plans and clear potential for profitability.

Executives from an international VC fund have arrived in Dubai to reassure regional investors that may have jitters about recent volatility in dot.com stocks.

Over 10% of the THLi fund’s pool of $1.1 billion has come from the region, and the fund’s managers will be telling its investors here that their money will only be going into companies with solid ideas, strong management teams and a clear path to profitability.

“Irrational exuberance in the market earlier drove up valuations and made it harder for sound investors to make an investment,” Jeffrey Coats, managing director of THLi told itp.net today. “We believe we’ll now have the opportunity to invest in better companies at better valuations.”

The days of funding companies with huge burn rates and vague profitability plans are over, added co-managing director Jim Brown. “Many of those companies should never have existed or should never have gone public,” said Brown.

The nine month old fund is targeting a return on its investments of around 30%. Investments are mainly in pre-IPO companies.

Up to 40% of the fund will be invested outside the United States, and the Middle East hasn’t been ruled out of the picture. “We haven’t earmarked a figure for this region,” said Coats. “[But] we’re completely open minded to this region.”

THLi believes it's the first major fund to have made the effort to come to the Middle East to update regional investors. THLi is saving those investors the time and trouble of a trip to THLi's imminent global investor meeting in New York.